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I downloaded Skype, but I cannot for the life of me get the video to work because the camera is not on. If I get the camera on using IMovie, Skype does not recognize it. What might I be doing wrong? I had no such problem with Skype on windows using a built in camera.

Hmmm I don't recall having to do anything in order for the camera to work. I do know that is can temperamental with poor internet connectivity. Sometimes I have to restart Skype to make things work properly. You may have to re-istall Skype

You can't use the camera in skype if you have an open program that is using the camera (ie imovie) Close all programs that are using the camera, and then open skype. Make a phone call with somebody. Click on the video button on the top tool bar, and they will be asked if its ok that you show them your camera... Until they hit accept, you will not see any video, and your camera will remain off.